By: Dr. G.B. Karthikeyan and Dr. K.P. Malathi Shiri

India is the world's second largest producer of textiles and garments after China. The 1970s brought a dramatic growth spurt to the apparel industry, which continue through 1980s to 1990s and established large, billion dollar corporation as the industry leaders which continued through the early 2000s, when smaller to medium sized apparel companies merged to become more competitive with larger companies. The industry shifted from an entrepreneurial generalist structure in which company owners made the critical marketing, product development, and manufacturing decision to a professional specialist structure with marketing specialist, product development specialist, and manufacturing specialist.

In the garment industry, the merchandiser acts as the BRIDGE between the management (or) industry and the buyer. He is the person who handles around 75% of the cost related to the garment & the production cost is only be almost about 25% of the garment, and is hence responsible part for the financial benefit of the Company. One of the important decisions regarding garment was the deregulation of the garment sector from the SSI sectors.

In the New Textile policy 2000, certain items were deserved from the SSl list. In March 2003, the SSl limit in the garment industry was set at RS.5crore.lf the investment in the unit was more than 5crore, then it was considered as 581 provided they exported 50% of the total production and export obligation of 50% of the new (or) additional production annually is achieved within a period of 3 years.50% of this export obligation should not be to non quota countries and foreign Direct Investment (FDI) should be to the extend of 25%. The FDI cap was allowed to be exceeded in EPZ's (Export Processing Zones) and SEZ (Special Economic Zones) only. (Gayatri D Rao 2005)

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About the Authors

The authors are Faculties in Hindustan School of Management, Coimbatore

Originally published in New Cloth Market; May 2009